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Clearwire eases pressure on Sprint Nextel, says CEO Hesse

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Clearwire Corp.'s (NASDAQ: CLWR) may be able to relieve some pressure on Sprint Nextel Corp.'s (NYSE: S) national wireless network, according to Sprint CEO Dan Hesse. Although Sprint's existing 3G network is touted to be one of the most reliable in the U.S., moving customers to a more efficient and faster 4G network -- like the ones Clearwire continues to launch -- de-stresses Sprint's existing network.


Now, if the company could find a way to retain its customers and make its network more efficient at the same time, that would be the start to a game plan to dig itself out of the customer-losing pit it continually finds itself in. Maybe in time that will happen. For now, Sprint can save capital expenditures in upgrading its current wireless network by moving traffic to Clearwire's network as those network assets are launched in several large metros across the U.S. But what will that solve?

This still won't ensure gargantuan profitability for Sprint, but it may ease the blow if it continues to lose hundreds of thousands of valuable contract wireless customers every quarter. Hesse even said that "We look at Clearwire pretty much as cap ex" -- and since Sprint owns 51% of that company, he's dead on. Sprint's strategy, though, continues to be a little cloudy. The company now has two large pre-paid wireless assets: Boost Mobile and Virgin Mobile.

It's raking in hundreds of thousands of customers from that segment of the wireless market. Its contract wireless (way more lucrative) is not doing so well, even with some recent successful high-end handset launches. Sprint still runs two completely separate wireless networks, and the Nextel infrastructure is what has made the huge increase in Sprint customers possible in the last eight months. Now that Sprint wants to offload traffic to Clearwire when it can, what is it preparing for? The customers still are not arriving in droves. Well, at least not to the Sprint side of the equation (just the Nextel side).

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Last updated: November 23, 2009: 07:14 AM

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